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XPRIMM News - THE ROMANIAN INSURANCE MARKET NEWSLETTER
No. 149, February 12th, 2010
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EDITORIAL


Looking optimistically towards... 2011

In early 2009, when the first signs of the economic crisis were felt, leaders of the main insurance companies were optimistic regarding the evolution of the profile market. The year 2010, marked by official forecasts favorable to the national economy, finds them much more pessimistic.
How else could it be, considering the potential economic revival forecasted for the second half of the current year will be felt in the results of insurers, most likely, starting 2011? Thus, between the moment when the economy gives the first signs of revival and the recovery of the insurance sector there is a gap of 8 months (2 months for the banking industry and another 6 for insurance). And, looking out the window and in the economic newspapers, spring still seems far away...
So, 2010 does not seem to be the year of insurance... but what should profile companies do while waiting for 2011?

Firstly, one could make the option of restructuring costs. Thus, the development of alternative distribution channels, such as online sales, strengthening partnerships with brokers would be only a few solutions in this respect...
Also, 2010 is a good year to focus on increasing the quality of the services provided and on customers’ loyalty. In a time when the incomes of the customers are limited, insurers should be aware that any customer lost during this period will be extremely difficult to regain...

At the same time, an opportunity for insurers could be the insurance need of the small enterprises, which, starting this year, will pay tax on profit, not on turnover, reason for which they will have to rethink the tax optimization strategy...

It is known that 2010 will not be an easy year for the market, but it will also pass soon... We are all waiting for the revival from 2011!

by mihaela.circu@mxp.ro

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BCR Asigurari de Viata
MILLENIUM INSURANCE BROKER

WILLIS
POLISH Re
Credit Europe Asigurari
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INTERVIEW


Interview with Karina ROSU,
Chief Executive Officer,
AON Romania

XPRIMM: How strong was the impact of the economic crisis on the insurance market in 2009?
Karina ROSU:
As I said before in an interview for XPRIMM, the insurance market reacts with a certain delay to the movements in the economy, so probably only in the fourth quarter of 2009 we saw the true effect of the economic crisis on the insurance market. In lei, written premiums in the first 3 quarters of 2009 were similar to those of 2008, but I expect to see a decrease in Q4 2009 compared to 2008, leading to an overall year decrease.

XPRIMM: How do you see the evolution of the insurance market in 2010, in the context of an extended economic crisis?
K.R:
Probably in 2010 we will see a similar trend, of slight decrease, because the market is still dominated by motor insurance, and on this segment we do not yet see significant changes of the trend.

XPRIMM: What is currently the most pressing problem of the insurance brokerage market (except the economic crisis)?
K.R:
A problem for brokers is currently the lack of consistency in quotations obtained from insurers, which puts the brokers in the situation to get different offers from different branches of the same insurer or from its various channels of distribution. I still believe that the problems mentioned in 2009 - limited capacity for large projects and lack of options for certain insurance classes - remain valid. As part of an international broker, we have solutions to these problems, through voluntary reinsurance placements or direct placements in the international market.

XPRIMM: How has the corporate segment evolved in 2009? How about the retail one?
K.R:
Given that the major share in our portfolio is represented by the corporate segment, I will comment on it. This year we did not have customers that gave up insurance completely, eventually there was a restriction on the number of insurance classes, to cover only the major exposures. We had situations in which we reduced insurance costs by renegotiating insurance premiums, taking advantage of the fact that the property insurance market was and still is very competitive and/or by modifying franchises.

XPRIMM: Do you consider Bucharest a saturated market in terms of competition?
K.R:
No - in terms of companies with Romanian capital. Yes - in terms of foreign investors, but here there is also the possibility of extending the local insurance lines.

XPRIMM: Is it appropriate, at this time, an expansion of the sales force? Do you think the economic situation brings new opportunities in finding people to work in insurance?
K.R:
We prefer now to focus on innovative solutions for sale, not on increasing the sales force.

XPRIMM: What opportunities do you see for your company’s activity in the next period?
K.R:
Increasing the number of complex projects, with high values, in infrastructure and energy, will make more and more necessary the involvement of international brokers that can offer customers, in addition to the access to international insurance markets, also complete solutions, including services of consulting and risk management. We also believe that there are significant opportunities on the employee benefits market, due to the fact that the labor force becomes more and more sophisticated and the demands of employers and employees are evolving.
It is possible that, depending on the evolution of the economy, such opportunities will materialize only towards the end of the year or even in 2011, but we will continue to consider this area as a priority in 2010, considering that the decision cycle for this type of insurance is long. We are investing in new technological solutions to efficiently access the retail market.
As you know, we have been involved for a long time in a project with great impact for the market and for consumers: participating in the organization and the implementation of the reinsurance program for PAID – the Insurance Pool against Natural Disasters, which will become operational in 2010. I think this program has great potential to revive the public perception regarding insurance and can be a positive impetus for insurers.

XPRIMM: What is the structure of the portfolio now? Has it suffered changes as a consequence of the economic crisis?
K.R:
It is similar to that of 2008, with an increase in the share of property insurance in particular, due to the CAR policies for a number of infrastructure projects.

XPRIMM: How do you assess the company’s results in 2009? How are they, compared to the 2008 results?
K.R:
We registered an increase of almost 10% of the volume of mediated premiums (up to approx. RON 136 million) and an increase of approximately 12% of the turnover (to almost RON 12 million).

XPRIMM: What are the main objectives of your company this year? (The total volume of mediations, personnel structure etc.)
K.R:
We want to maintain a similar growth pace as in 2009. As for the team, we want to strengthen the current team through joint actions and trainings and to continue the specialization of some of our colleagues on certain lines of insurance or industries. This year, we will make significant investments in new technology solutions that allow us to streamline activities and to provide new services and the access to new customer segments.

XPRIMM: Thank you!

by oleg.doronceanu@mxp.ro

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Karina ROSU
Karina ROSU,
Chief Executive Officer,
AON Romania

MEDICOVER
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UNSAR: Between 2005-2010, the MTPL tarrifs increased 3 times, the claims - 8 times
The MTPL policies tarrifs have increased over the 2005-2010 over three times, while the claims paid by insurers on the MTPL segment had a multiplying factor of 7-8. Thus, if in 2005, the MTPL claims volume amounted to RON 441 million, for the end of this year, insurers estimate a value of over RON 3 billion.
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by mihaela.circu@mxp.ro, 12.02.2010



Capitalizations of over EUR 300 million, also in 2010
Shareholders of the Romanian insurers are operating new capital increases, that companies need to face the losses registered in the conditions of a 2009 marked by the financial crisis. So, if last year the capitalizations made amounted to EUR 350 million, specialists expect the market will receive a similar contribution of capital this year.
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by andreea.ionete@mxp.ro, 11.02.2010



ISC approved the appointment of Marius BULUGEA as President of PAID
ISC confirmed, on the 1st of February, the information published exclusively by 1asig.ro on the 22nd of January, 2010, according to which Marius BULUGEA was appointed President of PAID, in the meeting on January 21st of the Administration Board of the company. Thus, the ISC Board approved, on the 1st of February, the Administration Board of PAID, the appointment as President/General Manager of Marius BULUGEA and that of Nicolae MUSAT as Vice-president.
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by andreea.ionete@mxp.ro, 02.02.2010



10% increase for AON Romania, in 2009
AON Romania, one of the most important insurance brokers on the local profile market, reported an increase of about 10% of the mediated premiums in 2009, totaling RON 136 million. Meanwhile, the company's turnover amounted to about RON 12 million, an evolution of 12% compared with 2008.
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by oleg.doronceanu@mxp.ro, 29.01.2010



SIGNAL IDUNA limits its activity in Romania; CEO resigns
Amid the current unfavorable conditions existing in the present on the health insurance market in Romania, the German group SIGNAL IDUNA has decided to limit the activity of the Romanian subsidiary until the profile segment evolves positively. Also, the shareholders of SIGNAL IDUNA Asigurari de Viata said they aim for continuing their business in our country but in a much more cautious manner by reducing the financial exposure they have in Romania.
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by oleg.doronceanu@mxp.ro, 29.01.2010



New-business in decline, retail threatened by price increases
"On the corporate side, many companies have gone bankrupt or have dramatically reduced activity, while others have decided to resort to self-insurance. In terms of retail, the population, that had already been affected by the decrease of the incomes, was confrunted with a 15-20% increase of the prices on the motor segment, the predominant class in their buying choices", said Antonio SOUVANNASOUCK, General Manager, ASIGEST Broker de Asigurare.
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by mihai.cracea@mxp.ro, 05.02.2010



KD Life - the first insurance company defeated by the crisis?
The Slovenian group KD Group denied, on Friday, rumors of bankruptcy of the Romanian subsidiary KD Life, circulated in the Romanian press, adding that it wants to focus on the businesses from more profitable regional markets.
"The continuation of the activity in Romania involves primarily a significant input of capital for a relatively small insurance market and, therefore, the company wants to reroute its capital to the markets where business is profitable", it says in the press release issued by the company.
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by oleg.doronceanu@mxp.ro, 08.02.2010



CHARTIS, the new name of AIG Romania
AIG Romania has changed its name to CHARTIS Romania, the brand under which AIG Europe operates since July 2009 - company that runs business in Romania under the right of establishment. So, last week, the Insurance Supervisory Commission approved the company's name change, which is registered with the new name in the Register of insurers on the site of the regulatory authority.
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by andreea.ionete@mxp.ro, 29.01.2010



Capital increase at EUROINS
The insurance company EUROINS Romania will increase its share capital by RON 12.5 million, by cash contribution of the shareholders. The decision, taken in November 2009, was published recently in the Official Gazette.
Thus, the capitalization of the company will reach RON 73.8 million, the operation taking place with the corresponding increase of the number of shares.
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by oleg.doronceanu@mxp.ro, 01.02.2010

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ASIGEST Agri



Casco Ieftin

Safety Broker


FADATA
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The 6th annual "Life Insurance in Russia and CIS" Conference starts on 25th of February in Moscow
Marcus Evans proudly presents the 6th annual "Life Insurance in Russia and CIS" Conference that will take place on the 25th and on the 26th of February 2010, in Moscow, Russia. The event wishes to offer a comprehensive view of the life insurance market potential in Russia and CIS and also to discuss the recent updates and improvement possibilities of tax legislation in life insurance sphere.
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by andreea.ionete@mxp.ro, 10.12.2009



Sixth International Risk Management Conference to be held in Kazakhstan
The Sixth International Risk Management Conference will be held traditionally on 14-15 April 2010 in Almaty, Kazakhstan. This will be the Sixth Annual on Risk Management Conference organized and sponsored by Eurasia Insurance Company.
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by andreea.ionete@mxp.ro, 10.12.2009



Tashkent International Insurance Forum
On April 8-9, 2010, SAIPRO holds Annual International Insurance Forum in the city of Tashkent, Republic of Uzbekistan.
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by andreea.ionete@mxp.ro, 10.12.2009



Russian Insurance Summit 2010
On May 20-23, 2010, the Russian Association of Insurers holds the VIII Annual International Insurance Summit in the city of Vladimir, club VELES. Within the framework of the Summit there will be discussions on the present situation and problems of the national insurance market in the context of international insurance development. The main theme of the Summit will be "Insurance into the Second Decade of the XXI Century".
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by andreea.ionete@mxp.ro, 10.12.2009



All-Russia Conference on Reinsurance has come to its 14th edition
All-Russian Union of Insurers, with the support of the business center "DELOVOY Format", proudly presents their next conference "Reinsurance Efficiency: Lessons of Crisis", to take place in Moscow, National Hotel, on 25-26 March 2010.
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by andreea.ionete@mxp.ro, 10.12.2009



The Ukrainian insurance market dropped 25% in 2009
Insurance companies in Ukraine have underwrote, in 2009, gross written premiums worth about EUR 1,6-1,7 billion, according to estimates made by Alexander FILONYUK, President of the Directorate, Ukraine's Insurers League (LIOU).
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by oleg.doronceanu@mxp.ro, 02.02.2010



Stagnation for the Slovenian insurance market in 2009
Slovenian insurance companies have reached, in the previous year, a volume of gross written premiums worth EUR 2 billion, up 2% compared to 2008. These results were predictable in the current economic context, but the growth dynamics was even lower than the results of 2002, when a 6% evolution had been registered.
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by oleg.doronceanu@mxp.ro, 01.02.2010

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FINANCIAL NEWS


ING Bank: Romania is out of recession
In quarterly terms, GDP has increased 0.6% in Q4, 2009, which is equivalent to going out of recession, an ING Bank analysis, taken over by Realitatea.net, shows. The estimates of the bank show that the economy increased 0.6% in the last three months of the past year vs. the previous quarter. ING Bank analysts also consider that the economic advance will continue also this quarter, and at annual level Romania will be "on plus" in the second quarter, when it will grow 1.3% against April-June 2009. As for unemployment, the economists of the bank consider that the unemployment rate could rise to 8.5-9%, but will not exceed 10 per cent.
by nineoclock.ro, 11.02.2010


EC proposes 2012 as deadline for Romania curbing its deficit
Romania took effective measures to correct its budget deficit, and the European Commission (EC) proposed to push back by one year, to 2012, the deadline for bringing the deficit under 3% of the GDP, the European executive announced on Monday.
"Romania has made a serious effort to limit the deterioration of its budget deficit and to preserve macroeconomic stability during the past year. The worsening of the economic situation since the initial recommendations were made, justifies extending the deadline by one year. But the consolidation effort must continue, under the conditions attached to the financial assistance program, to make sure that the deficit is corrected by 2012" said JoaquĆ­n ALMUNIA, European Economic and Monetary Affairs Commissioner.
In July 2009, the EC Okayed a proposition of the Commission to start an excessive deficit procedure against Romania, based on a deficit higher than 3% of the GDP in 2008, and recommended the deficit to be corrected below 3% by 2011 at latest. The initial deadline for taking effective measures was January 7, 2010.
by nineoclock.ro, 10.02.2010


Romania's commercial deficit decreased by 58.58% in 2009 to 9.73 billion euro
Romania's commercial deficit decreased last year with 58.58% to 9.73 billion EUR from 23.51 billion EUR in 2008, according to Romania's National Statistics Institute date. The decrease was due mainly because of a decrease of imports in the detriment of exports.
In the mentioned period, exports dropped by 13.9% to 29.03 billion EUR and imports diminished by 32.3% to 38.77 billion EUR. Cars and transports equipments continue to rule the exports with 42.8% followed by food, drinks and tobacco, fuel and other materials with 6% each.
In respect to imports, the biggest share is taken by cars and transports equipments with 33.8% followed by chemical products with 14%, fuel with 9.4%.
by hotnews.ro, 9.02.2010


Romanian Finance Ministry is optimistic about the country's economic recovery
Finance Ministry Sebastian VLADESCU attempted to send an optimistic message regarding Romania's economic situation and compared it to the tough winter Romanians are dealing. He said that maybe in economy it is not spring yet, but it's a less disturbing winter than the one we are dealing with.
Romanians slipped into an exaggerated pessimism regarding the capacity of the country to recover from the crisis. He underlined that the Finance ministry is not the one to take the country out of the crisis.
He said that Romania is a stable European country that is constantly evolving.
by hotnews.ro, 11.02.2010

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EDITORIAL | INTERVIEW | TOP PRESS |
CEE, RUSSIA&CIS
| FINANCIAL NEWS | EVENTS
EVENTS


6th Annual Conference - Life Insurance in Russia and CIS
25-26 February 2010
Moscow, Russia
Organizer: Marcus Evans
Media Partner: XPRIMM Insurance and Pensions
Official web-page: www.marcusevans.com


14th All-Russian Reinsurance Conference
25-26 March 2010
National Hotel, Moscow
Organizer: All-Russian Insurance Association& Group Delovoy Format
Media Partner: XPRIMM Insurance and Pensions
Official web-page: www.re-conference.ru


Tashkent International Insurance Forum
8-11 April 2010
Tashkent, Uzbekistan
Organizer: SAIPRO
Media Partner: XPRIMM Insurance and Pensions
Official web-page: www.tiif.uz


Sixth International Risk Management Conference
14-15 April 2010, Almaty, Kazakhstan
Organizer: EURASIA Insurance Company
Media Partner: PRIMM Insurance&Pensions Magazine
Official web-page: www.theeurasia.kz


Russian Insurance Summit 2010
20-23 May 2010
VELES Hotel, Vladimir, Russia
Organizer: All-Russian Insurance Association
Media Partner: XPRIMM Insurance and Pensions
Official web-page: ins-conference.org


FIAR - International Insurance-Reinsurance Forum
24-28 May 2010
Sinaia, Romania
13th Edition
Organizer: Media XPRIMM
Official web-page: www.fiar.ro

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XPRIMM Newsletters

THE EDITORIAL STAFF:

President: Sergiu COSTACHE CEO: Adriana PANCIU
Business Development Director: Alexandru D. CIUNCAN

Editor in Chief: Mihaela CIRCU
Scientific Advisor: Daniela GHETU
International Column Coordinator: Andreea IONETE
Senior Editors: Vlad PANCIU, Oleg DORONCEANU
Editors: Vlad BOLDIJAR, Oana RADU, Mihai CRACEA, Andreea STATE
General Secretary: Lidia POP

Accounts Manager: Georgiana OPREA
IT Department: Octavian GRIGOR, Dorin PALADE, Cosmin ARMASESCU

e-mail: xprimm@primm.ro

PUBLISHED BY: Media XPRIMM


Reproduction or use without permission of editorial or graphic content, in any manner, is prohibited. The Editorial Staff is not responsible for the truthfulness or the accuracy of the presented data. The Editorial Staff has the right to present the data in it's own manner. In what concerns the use, in any manner, of the information contained in this e-mail, Romanian laws apply.

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